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South African waters drawing in energy companies

Statoil, Eni among those winning exploration bids for offshore Mozambique.

By Daniel J. Graeber
South African waters drawing in energy companies
European energy companies among those showing interest in basins in southern African waters. Statoil and Eni add Mozambique acreage to their portfolios. Photo by James Jones Jr./UPI

STAVANGER, Norway, Oct. 30 (UPI) -- Southern African waters drew more interest from energy explorers with Norway's Statoil and Italy's Eni wading into Mozambique waters.

Statoil and Eni were among those winning bids to explore for potential reserves in the waters off the coast of Mozambique, where depths range from 650 feet to 5,900 feet.

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Nick Maden, a regional exploration director for Statoil, said Mozambique waters are among the more promising frontier basins in the area, where the oil potential is said to be "significant."

"The position strengthens and develops our global exploration portfolio," he said in statement.

Eni last year said it discovered natural gas in a well in an area off the Mozambique coast thought to hold 85 trillion cubic feet of gas in place. The company has said it was eager to help Mozambique become a hub for liquefied natural gas exports to Asian economies.

Analysis released last year from consultant firm IHS said East African basins were expected to add another 1 million barrels per day in production by 2025, led by Mozambique and Tanzania. More recently, the region is home to more than 25 percent of the natural gas discoveries made worldwide between 2010 and 2013.

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The region has drawn increased interest in recent days. Statoil this week acquired a 35 percent stake in a frontier basin off the southeast coast of South Africa from a regional exploration subsidiary of Exxon Mobil. The so-called Tugela South exploration basin covers about 3,500 square miles. Water depths are up to 1.1 miles.

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